Chancellor Olaf Scholz said Germany would back Ukraine — and coordinate decisions on delivering battle tanks with allies — but will ensure that a direct conflict between Russia and NATO is avoided.
(Bloomberg) — Chancellor Olaf Scholz said Germany would back Ukraine — and coordinate decisions on delivering battle tanks with allies — but will ensure that a direct conflict between Russia and NATO is avoided.
“We support Ukraine as long as it is necessary, with all the means that we can use, but also always avoiding that this war is escalating” into a direct Russia-NATO conflict, Scholz said in an interview on Tuesday with Bloomberg Editor-in-Chief John Micklethwait.
The German leader said he’s in talks with allies over potentially supplying heavy tanks to Ukraine, but said any announcements would have to come in lockstep with others.
(See RSAN on the Bloomberg Terminal for the Russian Sanctions Dashboard.)
Key Developments
- Blinken, Cleverly Vow to Give Ukraine Arms to Retake Territory
- Scholz Sees Germany Avoiding Recession With New Gas Supplies
- Putin’s Cash Flood From Exports Slows Amid Curbs on Oil, Gas
- Russian Sanctions Will Take Years to Bare Teeth, EBRD Says
- Scholz Nominates Pistorius as Germany’s Next Defense Minister
- Kissinger Reverses, Sheds Resistance to Ukraine Joining NATO
On the Ground
Ukrainian troops repelled attacks near more than 20 settlements, including Soledar and Bakhmut in the eastern Donetsk region over the past day, the General Staff said on Facebook. According to the statement, Russian forces conducted two missile and seven air strikes, as well as more than 70 attacks from multiple-launch rocket systems over the past day. Six Russian missile carriers capable of launching a total of 44 Kalibr missiles are deployed in the Black sea, Ukrainian military spokeswoman Natalia Humenyuk said on television.
(All times CET)
Blinken, Cleverly Vow to Provide Arms for Retaking Territory (12:20 a.m.)
The top US and UK diplomats pledged to give Ukraine the weapons it needs to recapture territory it lost after Russia invaded last February, with the goal of putting the country in the best possible position to negotiate once talks to end the war eventually begin.
With Western nations providing more powerful weapons such as tanks and other armored vehicles, Secretary of State Antony Blinken said the allies would supply the Ukrainians with the equipment they require as battlefield conditions change.
“We are determined together as well as with many others to make sure the Ukrainians have the ability to regain what they’ve lost and deal with the Russian aggression,” Blinken said at a briefing alongside UK Foreign Secretary James Cleverly. Blinken pointed to an upcoming meeting of allied defense officials in Germany as the moment when more commitments would be made.
Ukraine Urges Partners To Prevent Russia Getting Drone Technologies (8:10 p.m.)
Mykhaylo Fedorov, Ukraine’s Deputy Prime Minister, urged its international partners to impede Russia’s ability to buy components for drones it uses to attack the country.
“As Russia continues to purchase components for its drones using virtual assets and other ways,” he said during economic forum in Davos. “One needs to thoroughly watch what they are doing and limit Russia’s capabilities to develop technologies with sanctions.”
Kissinger Reverses, Sheds Resistance to Ukraine Joining NATO (7:11 p.m.)
Former US Secretary of State Henry Kissinger said Ukraine joining NATO could be an “appropriate outcome” of Russia’s invasion, while reiterating his call for a negotiated solution to the conflict.
“The idea of a neutral Ukraine under these conditions is no longer meaningful,” Kissinger, 99, told the World Economic Forum’s annual meeting in Davos, Switzerland on Tuesday. Kissinger, long an opponent of Ukraine’s membership of the organization, has softened his stance on the issue in recent months.
Kissinger, a former secretary of state and national security adviser, said he believes in maintaining dialog with Russia while the war continues, with a view toward ending fighting if Ukraine is able to recapture territory that President Vladimir Putin’s forces seized after the Feb. 24 invasion. He warned against direct conflict between the West and Russia and stressed the importance of allowing Russia to rejoin the international system.
Scholz Says Any Tank Decision to Be Taken With Allies (5:22 p.m.)
The German chancellor, who is under pressure to deliver Leopard-2 battle tanks to Kyiv, said any such decision will be taken in close cooperation with US and European allies.
“One message is above all: We always act together with our allies and friends — we are never going alone — because this is necessary in a very difficult situation like this.”
Ukraine’s Top Commander Meets His US Counterpart in Poland (5:08 p.m.)
Ukraine’s commander-in-chief of the Armed Forces, Valeriy Zaluzhnyi, said he met his US counterpart General Mark Milley for the first time in person in Poland.
“I extended my gratitude to General Mark Milley for the unwavering support and assistance provided by the United States of America and allies to Ukraine,” Zaluzhnyi said on his Telegram account. “I outlined the urgent needs of the Armed Forces of Ukraine meeting which will accelerate our Victory.”
Finland and Sweden ‘Tick All Boxes’ to Join NATO Now, Marin Says (4:39 p.m.)
Finland and Sweden have both “ticked all the boxes” during their bid to join the North Atlantic Treaty Organization and the ongoing process to approve their entry to the military alliance should have been faster, Finland’s Prime Minister Sanna Marin said.
“We are fully prepared to become NATO members and there shouldn’t be obstacles on the way,” Marin said in conversation with CNN anchor Fareed Zakaria at Davos, referring to roadblocks mounted by Turkey.
Cyberattack Disrupts Ukraine Cyber Briefing Feed, Official Says (4:29 p.m.)
The livestream of a press conference by Ukrainian authorities on Russian hacking was repeatedly interrupted by a cyberattack, according to a senior government official.
Yurii Shchyhol, head of the State Service for Special Communications and Information Protection, said Ukraine was targeted with 2,194 cyberattacks in 2022 — a quarter of which targeted the government. Among the other most common targets were the energy, logistics, telecommunications and financial sectors, he said, during a press conference in which the online broadcast was repeatedly interrupted.
Russian Sanctions Will Take Years to Bare Teeth, EBRD Says (4:24 p.m.)
EBRD’s chief economist Javorcik said predictions that a barrage of punitive measures against the Kremlin in response to its invasion of Ukraine would trigger an economic shock were misplaced.
“That was unrealistic,” Javorcik said in an interview at the World Economic Forum’s annual meeting in Davos, Switzerland. “Sanctions work through this invisible channel – productivity. It is not something palpable unless you are a data cruncher. Sanctions are working — but the effect will be long term.”
Sweden Wants EU To Do More On Sanctions Circumvention, Frozen Assets (4:06 p.m.)
Swedish Foreign Minister Tobias Billstrom said doing more on the circumvention of sanctions could be part of the bloc’s next package of restrictions.
“The number of sanctions have risen with every new package, but it’s still also the question of circumvention or the attempts to circumvent,” he said. “What are we to do with those who try to circumvent or all these attempts,” he added. “I think that’s something which the Commission also should be looking into.”
Serbia Calls on Russia to Stop Recruiting Among Its Citizens for War (2:50 p.m.)
Serbian President Aleksandar Vucic criticized an advertisement by Russian state-backed mercenary Wagner Group that sought to hire Serbs to fight in Ukraine.
The nation’s legislation bans Serbs from joining forces abroad, Vucic said on a private television network late Monday, urging Wagner to stop such calls.
Putin’s Cash Flood From Exports Slows Amid Curbs on Oil, Gas (2:39 p.m.)
Russia had its smallest current-account surplus in more than a year as new restrictions on its oil exports endanger what’s become a critical source of hard currency for the Kremlin since the invasion of Ukraine.
The surplus in the current account — roughly the difference between exports and imports — decreased to $31.4 billion in the fourth quarter, down from $48 billion in the previous three months, according to preliminary central bank data published on Tuesday.
Ukraine Sells Sea Port for $5.5 Million to Boost Cargo Turnover (1:46 p.m.)
Ukraine sold the sea trade port of Ust-Dunaysk on the Danube river for $5.5 million as the government banks on private investors to ramp up cargo turnover. Odesa-based fertilizer trader Eliksir Ukraina purchased the port at an auction after outbidding eight competitors, the public procurement platform Prozorro said.
Ust-Dunaysk resumed operations in April, one of the Ukrainian ports to do so after Russia’s February invasion of Ukraine, which is a leading exporter of wheat, corn and vegetable oil.
Blackrock’s Fink Says Building Ukraine Reconstruction Fund (1:20 p.m.)
The Ukrainian government hired BlackRock Inc. to help build a reconstruction fund for the war-battered country and the fund has “the whole team tasked,” Chief Executive Officer Larry Fink said in an interview with Bloomberg TV at the World Economic Forum in Davos.
“Our job is to make sure that the opportunities for private capital can come to Ukraine and we will have a fair and just return on that,” Fink said, adding that BlackRock is also helping Ukraine to hire the right team. “Our job is to make sure that the new Ukraine is an open society, open economy and capital will be there.”
President Zelenskiy last year discussed having BlackRock provide free consultations to his government on both a fund and support for the country’s economy.
Putin Says Defense Industry Boosting Russian Economy (12:43 p.m.)
Russia’s defense industry has boosted output sharply in the last year amid the war in Ukraine, with some factories working nearly around the clock, helping support overall economic growth, Vladimir Putin said.
The Russian president told a televised video-conference with officials that the economy contracted 2.1% in the first 11 months of last year and will report a drop of 2.5% for the full year, less than many forecasters had expected. Government spending has surged amid the war, widening the deficit as revenues fall short amid sanctions and other restrictions on Russia.
Ukraine’s First Lady Addresses World Economic Forum (12:11 a.m.)
Zelenska called for the release of Ukrainians and urged participants at the World Economic Forum in Davos to unite efforts to contain Russian aggression to ensure existing challenges don’t become a full-blown global crisis.
Russia to Boost Troops in West With Army Expansion (10:49 a.m.)
New structures in the regions around Moscow, St. Petersburg and Karelia on the border with Finland will be created under the program, Defense Minister Sergei Shoigu told commanders. The major changes will start this year and continue through 2026, while “self-sufficient” units will be set up on the Ukrainian territories that Russia has illegally annexed, he said.
Putin last month approved a plan to bolster the size of Russia’s military from the current target level of 1.15 million but the Kremlin hasn’t said how fast that will take place.
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